Question

What is the maximum percentage allowed for reserves for unexpired risks in the computation of profits in general insurance companies in India?

a.

25%

b.

50%

c.

75%

d.

100%

Answer: (b).50% Explanation:In the computation of profits in general insurance companies in India, the maximum percentage allowed for reserves for unexpired risks is 50%. This percentage applies to Fire and Miscellaneous Accident business, while for Marine business, the maximum allowed is 100%. These percentages are prescribed by the Indian Income Tax Act, 1961.

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Q. What is the maximum percentage allowed for reserves for unexpired risks in the computation of profits in general insurance companies in India?

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